Redflex Holdings

Redflex Holdings provides vehicle monitoring and enforcement services for government, police, and traffic departments globally.

Redflex Holdings
Public company (ASX: RDF)
IndustryRoad traffic enforcement products and services
FoundedJanuary 1997 (1997-01)
Headquarters
South Melbourne, Victoria
,
Australia
Websitewww.redflex.com.au

Redflex develops and manufactures a wide range of digital photo enforcement products and systems, utilizing advanced sensor and image capture technologies. Redflex products include fixed multi-lane, multi-sensor red light and speed enforcement, mobile radar and laser speed enforcement systems and infringement processing software.

Products and services

Redflex has programs to deter red light running, speeding, passing stopped school buses, crossing railroad tracks while the alarm is active, running stop signs, unauthorized vehicles driving, vehicular theft, stopping in bus lanes, speeding in highway work zones, speeding in an intersection running a red light, and travelling down a sidewalk when a pedestrian is present. Redflex also has technology used to help prevent crashes by red light runners.

Redflex operations

Redflex operates primarily in Australia and the United States of America, and was listed on the Australian Securities Exchange in January 1997.[1] Redflex Holdings consists of two distinct companies; Redflex Traffic Systems Pty. Ltd. covering Australia and global operations and Redflex Traffic Systems Inc. covering the US market. The company works with partners in other countries, such as ChinaTel Group in the People's Republic of China.[2] Redflex is based in South Melbourne, Victoria where it runs its systems engineering operation as well as its system integration and research and development programs.

In 2011, Redflex was the subject of a failed A$303.5 million hostile takeover bid by the Macquarie Group and Carlyle Group.[3][4]

Opposition to traffic enforcement cameras owned by Redflex has resulted in their removal in some American cities in Texas and California.[5]

Bribery investigations

In late 2010, Redflex executives were implicated in a bribery investigation in Chicago, Illinois. Following up on a letter from a whistleblower, the Chicago Tribune reported that a Redflex consultant had been making improper payments to a City of Chicago transportation official, John Bills, who was responsible for overseeing the awarding of contracts for the installation and operation of Chicago's widely hated red light camera system. The consultant, Marty O'Malley, who was a long time friend of Bills hired to oversee the Chicago contract, had received US$570,000 in commissions for the contract which had provided approximately US$100 million in revenue for Redflex. A two-year internal investigation conducted by Redflex reported in October 2012 that it had found only one instance of an inappropriate expenditure: a two-star hotel stay at the Days Inn for Bills, paid for by the consultant, who was subsequently sent for anti-bribery training. The Chicago contract is the company's largest in North America. With 384 cameras it provides 13% of Redflex Holdings' worldwide revenue.[6]

After the Chicago Tribune found additional evidence of improprieties in the relationship between Redflex executives and consultants and Chicago officials. Redflex hired a "former Chicago inspector general, David Hoffman" to lead a new investigation.[6] On 8 February 2013, Redflex received notification from the City of Chicago's Department of Procurement Services that it will "not be considered a responsible vendor for the new RFP for red light cameras that the City intends to issue in the near future." In response, Redflex Holdings chairman of the Australian Board of Directors Max Findlay, board member Ian Davis and the company's top sales executive resigned after being blamed for the company's problems in Chicago.[7][8] Hoffman's report, delivered to the Redflex board in February 2013, found that Redflex had provided Bills with vacations and other gifts paid for by the expense account of Redflex Executive Vice-President Aaron Rosenberg. Hoffman also found that Redflex's president had knowledge of the arrangement and had lied to Chicago's administration about the extent of it.[9] On 20 February, Redflex terminated Rosenberg and filed a lawsuit against him alleging "dishonest and unethical conduct".[7] In a 1 March email addressed to all employees, Redflex Holdings chief executive officer and President Robert DeVincenzi, who took over the company in September 2012, announced the resignations of three top executives in its Phoenix, Arizona headquarters: former President & CEO Karen Finley; Redflex's General Legal Counsel Andrejs Bunkse and Chief Financial Officer Sean Nolen.[6]

The bribery investigation and ensuing events caused trading in Redflex shares to be halted twice.[10] In 2012, the company reported a net profit of $21.3 million; On 11 February 2013 Redflex announced the figure would be adjusted to US$5.5 million due to legal costs which, after taxes of US$6.2 million are paid, would likely result in the company posting a loss.[8]

In 2015, the Federal Bureau of Investigation and the Internal Revenue Service brought charges of bribery and fraud against former Redflex CEO Karen L. Finley of Cave Creek Arizona, to which she pleaded guilty to a one-count information charging her with conspiracy to commit federal programs bribery and honest services wire and mail fraud. Finley admitted to a scheme that funneled campaign contributions to elected officials in Columbus and Cincinnati to either obtain or continue the contracts to supply photo red light enforcement.[11] On 19 October 2016, she was sentenced to fourteen months of confinement for the scheme.[12]

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References
  1. "Share Price & Information - ASX".
  2. "ChinaTel Group, Inc. Signs MOU with Redflex, Traffic Systems Pty. Ltd., Beijing China, Aiming to Establish High Speed Wireless Broadband Based Traffic Management Systems in the People's Republic of China". Reuters. 15 January 2009.
  3. Kelly, Ross (9 May 2012). "Redflex shareholders shun takeover offer from Macquarie, Carlyle". The Australian. Dow Jones Newswires. Retrieved 11 July 2012.
  4. McIlwraith, Ian (10 May 2012). "Red faces in failed Redflex merger vote". The Sydney Morning Herald. Retrieved 11 July 2012.
  5. "2/20/2015 California Cities Continue To Dump Red Light Cameras". The Newspaper.com. 20 February 2015. Retrieved 11 July 2012.
  6. Kidwell, David 3 more Redflex execs out as fallout continues for city's red light camera firm Chicago Tribune 2 March 2013
  7. Kidwell, David Red-light camera firm fires VP, sues him over Chicago scandal Chicago Tribune 22 February 2013
  8. Largest Red Light Camera Program In World Faces Widened Corruption Probe thenewspaper.com 11 February 2013
  9. Kidwell, David Red light camera firm admits it likely bribed Chicago official Chicago Tribune 2 March 2013
  10. "2013-02-11 Update re Chicago and Earnings Guidance" (PDF). Redflex Holdings: Investor Relations. 11 February 2013.
  11. "Former CEO Pleads Guilty to Bribery and Fraud Scheme Involving Red Light Camera Contracts". Department of Justice. 19 June 2015.
  12. "Red Light Traffic Camera CEO Sentneced for Corruption in Illinois and Ohio". Prison Legal News. March 2017. Retrieved 30 March 2017.
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